This car is all smiles, all the time, and is practical enough to be driven absolutely every day of the year.

There is no beating around the bush on this one – the 2018 Audi RS3 quattro is one of the best cars on sale today. No, not just within its segment or its price point; this is one of the few test cars that we found very difficult to give back when our loan was coming to an end. This is a new sedan from Audi Sport, formerly known as Quattro GmbH, the German automaker’s performance side. The last compact sedan to be sold in North America with an RS badge was the RS4, last seen on these shores over a decade ago.

Based on Audi’s formidable A3 sedan, the RS3 sits wider, lower, and looks meaner. Its underpinnings are the Volkswagen Group’s MQB platform, which is also the basis for cars such as the TT (reviewed here), the Golf, and even the large Atlas crossover. All of that said, the RS3 has looks that are understated yet menacing when It’s looked at closely. Our test vehicle came painted in Nardo Grey, subjectively the best colour Audi offers. The Black Optics package ($850) adds black accents throughout the car including the grille and side mirrors. 19” Arm Rotor-style wheels in Anthracite are wrapped with Pirelli P-Zero rubber.

Under the hood of the RS3 is the new hot ticket in the Audi lineup, a turbocharged and intercooled 2.5L inline five-cylinder motor. This is one of the only fives available for sale at the time of this writing, making it a breed that is quite close to extinction. It puts out a fiery 400 horsepower at 7,000RPM, and 354 lb-ft. of torque at 1,700RPM, both numbers that are identical to the TT RS that is the two-door sibling to this car. This car is fast, notably quicker than the S3 (reviewed here) with about 100 fewer horses; and turbo lag is minimal.

The S-tronic dual-clutch gearbox has seven gears, and it’s a brilliant transmission that always knows the right gear to be in. Keeping the transmission in “Sport” and the Audi Drive Select in “Dynamic”, the RS3 is always ready to pounce. Audi Canada claims a 0-100 run of 4.1 seconds, and a very aggressive launch control setting makes this task easy even for amateurs. The power steering box is electrically assisted but is one of the better setups out there, with good weight and some artificial feedback that makes the car just as much fun in the corners as it is in a straight line.

What really stands out about this car is that the chassis always feels glued to the road; the amount of grip is insanely good. A front to rear weight bias of 57.7/42.3% is also quite good, though there’s no denying this car’s all-wheel-drive system is front-biased. The RS3 comes in at 277 pounds more than the smaller and slightly livelier (on paper) TT RS, but by no means will the average driver feel any real difference between the two cars in everyday driving. The Audi Sport package replaces the adaptive dampers with a fixed sport suspension, which is a bit on the firmer side, but still significantly more manageable on a daily basis than the TT RS.

Audi rates the RS3 at 12.3L/100km city and 8.2L/100km on the highway, when operating on 91-octane premium fuel (required). The majority of our week with the car consisted of mostly city driving, which returned an overall average of 11.3L/100km with liberal use of “Dynamic” mode. We happened to have this car over a long weekend though, which included a cottage run out of the city. The hot sedan easily maintained a highway average of 7.8L/100km over about 300km, which surpasses its rating.

The RS3 starts at $62,900, but opting for extras will very quickly bring the price up like on our tester, which rang in at $76,945. The biggest thing is front carbon ceramic brakes, which cost $5,800. Additional options on our tester included the 19” wheels, an Audi Sport package, Technology package, sport exhaust, and carbon fiber inlays. Personally, I love the way this car looks, so I’d have the Black Optics package, the same paint, and the 19” wheels, keeping the price right around $65,000. Oh, and the sport exhaust is mandatory, and is a great value at $850.

There isn’t much to the interior of the RS3, and that only adds to the car’s appeal for me. Everything is very easy to find and manage, and the Virtual Cockpit system only takes a few minutes of initial orientation to get the hang of. The centre-mounted screen is a welcomed addition over the TT, and the Apple CarPlay capability is a great touch. This car was equipped with the sport bucket seats that are manually adjustable, and they provide excellent support and good bolstering. The RS3 focuses on performance, and hence no powered seats are available.

On an otherwise perfect car, there is just one other thing that I’d equip differently – the ceramic brakes. The 14.6” front ceramic rotors are grabby and haul the car to a stop quickly and predictably, but everyone I know who tracks their (ceramics-equipped) car swaps in standard brakes for track days. Ceramics are excellent in performance, but very expensive to replace and they squeak considerably in everyday driving. I think I would save the $5,800 and opt for the standard brakes.

Here’s the thing with the 2018 Audi RS3 quattro – it’s not particularly cheap and starts around the same price as the BMW M2 (reviewed here). The M2 may be a rear-drive car and favoured by many, but I’ll have the RS3. This car is all smiles, all the time, and is practical enough to be driven absolutely every day of the year, regardless of weather or traffic. There isn’t a single situation that I can think of where I would look outside and say “the RS3 wouldn’t be boatloads of fun today”. If you’re in the market for a very usable and immensely fun compact sedan, you really won’t find this much capability anywhere else at this price point.